Strategic Finance loan book sale stalls

Receivers John Fisk and Colin McCloy of PricewaterhouseCoopers expect to recover between 12% and 35% of the principal amount owed to debenture holders after the sales process threw up sub-par offers, they said in a letter to investors.  

The bottom-end of the range is less than one of the low-ball offers investors received from Australian-based Stock & Share Trading Co., which offered 15 cents in the dollar for up to $200,000 worth of debt in April.  

"Given that the final or near final offers fell short of even our ‘low' estimate of gross recoveries from the loan book, we consider that the best possible outcome for secured debenture investors will be achieved via the receivers continuing to realise the loan book," they said in their letter.  

Last month, investors got their first payment of 2 cents in the dollar, a total amount of $7.4 million, after Strategic Finance received just $5.4 million from the $42 million it had recovered since March, most of which went to prior ranking creditors.